 Newly tipped on Master Investor, primarily referring to the Houthi rebel attacks in the Red Sea pushing up shipping rates:
Extracts:
"However, the ongoing stress created in re-routing shipping around the Cape has seen costs increasing for both the shipping companies and their customers.
That is when companies like Clarkson (LON:CKN) and Braemar (LON:BMS) become extremely important advisors and agents.
Volatility and uncertainty in shipping markets is usually positive for shipbrokers.
Clarkson stated at its AGM on Thursday of last week that it had made a positive start to the year, helping its clients to navigate the ongoing complexities and disruptions to global trade, by providing the expertise, data and insights to enable them to make the right decisions for their organisations.
For both groups their Forward Order Books must have seen some good uplift, the benefit from which will become evident in the second half of this year.
Rapidly rising freight rates suggest that fears of delayed goods have kicked off the peak season early this year.
Shippers fear major delays on goods due to new supply chain disruptions.
This has jump-started the peak season and sent spot rates soaring.
Elsewhere there are reports that the market for buying and selling second-hand dry bulk carriers is in the top 20% of the price development since 2000, while for tankers it is in the top 10%.
The past six months have seen significant price increases for used dry cargo ships and tankers.
However, I now really suggest that investors should keep their eyes on the shares of my favourite shipping services group."
"In the last few months, a couple of the group’s competitors have been acquiring stakes in the company – the Peter Dohle Group and Lightship Chartering, both declaring just over 3.0% holdings in the BMS equity.
The group should be announcing its 2024 results, which are not expected to see any surprises, before the end of this month.
At this stage expectations for the current year to end February 2025, are for £150.2m of revenues and £15.8m pre-tax profits, generating nearly 47p per share in earnings and easily covering an estimated 14.0p in dividend.
Last night the shares closed at 295p at which level they are trading on a miniscule 6.3 times prospective price-to-earnings ratio, while yielding a very healthy 4.7%.
I believe that they will soon be trading at levels far higher than on 8th January and I have confidence in my aim of early-May at 350p." |
Can anyone understand their acquisition related expenditure and why that should be an adjusted item? It's very material but to me looks like a complete fudge adjustment |
Publication of FY24 Results
The Group will announce its audited final results for the year ended 29 February 2024 on Thursday, 23 May 2024 and publish its 2024 Annual Report and Accounts shortly thereafter. Previous FY24 guidance remains unchanged, with revenue of not less than £150m (FY23: £153m) and underlying operating profit of not less than £18m, in line with market expectations (1).
(1) Company compiled consensus as at the date of this announcement: FY24 revenue of £150.4m and FY24 underlying operating profit (before acquisition-related expenditure) of £18m. |
Must be pleasing for shareholders that BMS looks to have finally secured a management team with the knowledge, experience and talent, to potentially deliver growth capable of challenging global market leader Clarkson.
Been a long time coming for its long suffering shareholders, who have been rewarded for their loyalty since the previous shipping market cycle bottom in 2000, with just a 72% share-price increase from 169p to 292p.
Whereas Clarkson, has generated 49 fold (4,923%) of capital growth since 2000 as a result of a shareprice increase from 82p to 4,050p. In addition, the stock has returned 10+ fold in dividends ........for a total 31% CAGR for shareholders over the last 24 years.
At the current stage of this latest shipping market cycle, BMS' mix of shipbroking business, looks like it may have the potential to deliver a performance over the likely 3 years or so left of this latest shipping market cycle recovery/boom stage, capable of taking out the stock's circa 600p all time high price.
AIMHO/DYOR
Declaration: a shipping industry professional who has held Clarkson since 1999, other than for a brief 18 month period during 2007/8. |
All the take overs are moving everyone still listed up the pile. |
It looks like BMS will be promoted to the FTSE Small Cap Index in the next review on 29th May.
Which could provide some impetus for the next leg up if all goes well: |
Still quite a large spread here. |
Surely we must be a takeover target with the share price remaining under 300p? |
Cheers Tole - particularly useful info about the two new investors in BMS from the shipping sector. |
 https://masterinvestor.co.uk/equities/who-are-the-two-competitors-buying-into-braemars-equity/Who Are The Two Competitors Buying Into Braemar's Equity?By Mark Watson-Mitchell 07 May 2024 5 mins. to readWho Are The Two Competitors Buying Into Braemar's Equity?It could prove to be excellent timing for the latest declared buyer of equity in my favourite shipping services group Braemar (LON:BMS). Later this week its larger competitor, the £1.23bn capitalised Clarkson (LON:CKN), will be holding its AGM, so we will, no doubt, get an update on life within the sector. Second Shipping Sector Group Buys In I noticed that another shipping services group has recently been putting together a declared stake in Braemar's equity. On Friday afternoon last week, it was declared that Minna Invest GmbH from Hamburg, Germany had put together a 992,398 shareholding in BMS. There is scant information available about Minna Invest to tell us immediately who is behind the stake. However, I have found out that Jan Peter Döhle and Jost Döhle are the two Managing Directors of Minna Invest. The Döhle Group covers all parts and aspects of the modern shipping business: "We offer a wide range of services including financial, commercial, and technical support, as well as insurance and crew management. Apart from our complementary activities provided by the companies within the Group, our core competencies lie in chartering as well as sale and purchase. With its numerous offices, subsidiaries, and partner companies located worldwide Peter Döhle Group offers tailor-made solutions for the whole shipping industry." The Döhle Group controls the world's largest tramp-owned fleet of containerships, comprising a total of around 415 highly modern vessels. The fleet ranges from small feeder vessels of around 300 TEU up to ships of 13,000 TEU capacity (a TEU is a 20ft long equivalent unit container). All the fleet's ships fulfill today's market requirements such as super-slow steaming and high reefer capacity. Many are equipped with their own cargo gear, making the fleet versatile as well as technically and commercially competitive in all areas of the world. The Döhle group, which has more than $8bn assets under its management, offers a wide range of services: sale & purchase; technical management; crew management; insurance; commercial management; bunker trading; financial restructuring; corporate services; shipping software; and shipping agency & logistics. That Now Makes Two Competitors Recently Into The Equity Readers may well remember that on 10th January this year I noted that another player in the shipping sector had bought into the BMS equity. I revealed that an ambitious Geneva-based shipbroking company had been putting together a 'major shareholding' in the group's equity.? Lightship SA had bought some 1m shares representing 3.04% of the issued stock.?? Lightship Chartering, is 51.5% owned by Danish founder and chairman Morten Have.? Sune Fladberg, the private company's CEO, was reported as stating that:? "It's quite simple, we believe strongly in shipping in the near future and are looking for opportunities to invest further in the industry.? We think the valuation in Braemar is very attractive at the moment."? What Did The New Buyers Pay? In early January I assessed that Lightship must have paid up to 290p a share for its holding. Whereas Minna could have been paying around 250p to 275p a share for its position. Last week the Braemar shares hit 284p before closing on Friday night at 277p, valuing the whole group at just £79m. The company's results for the year to end February 2024 should be declared within the next three weeks or so. In its 20th March issued Trading Update the group declared that it had achieved another strong performance, with revenue and underlying operating profit?for FY24 in line with market expectations at £150m and £18m respectively. Understandably the net cash position had dropped from £7m in the bank to just £1m at the year end, but last year it had covered the costs of the internal independent investigation conducted and concluded in 2023, as well as certain tax payments and share buy-backs during the period. However, impressively it announced that it had an Order Book of $83m, which was 47% ahead of the 2023 figure of $56m. Why Invest In Braemar? When asked 'why invest in Braemar?' the group responds: "We are one of only two publicly traded shipbroking companies on the London Stock Exchange, offering an attractive opportunity to invest in the shipping industry without needing to invest directly in ships. As a leading global shipbroker with offices in London, Singapore, Beijing, Geneva, Perth, Dubai, Athens, Hamburg, Melbourne, Madrid, Shanghai, and Houston, we're well-positioned to serve key industry players across different time zones and cultures. Our operations are diversified across Tankers, Dry Cargo, Sale & Purchase, Renewables, Financial and Offshore in order to generate a reliable, less cyclical income stream." Broker's Estimates Estimates for the current year to end February 2025 are for around £150m of revenues and £15.8m pre-tax profits, worth 46.6p per share in earnings and more than three times covering a 14.0p per share dividend. Analyst Price Objectives for the shares range from 385p to 505p, against Friday night's closing 277p. Results Due Before End May In late March I wrote that: "The May figures could well see upgrades helping to pinpoint just how undervalued this group's shares are at last night's closing price of 256p. I still find it hard to understand why these shares are so lowly valued, they are destined to rise above the 300p level fairly soon." The above estimates show that the shares of Braemar are an extremely attractive proposition, which is more than likely to be the reasoning behind two of its competitors buying into the group's equity. On 5.9 times current year prospective price-to-earnings ratio and yielding 5.05% the shares are almost a giveaway, in fact, I now set a new Target Price for Braemar's shares at 350p. |
Yep, good to see another institutional shareholder buying and now declaring a major holding. They now have 992,398 shares and 3.01%.
They don't appear as having over 2% on the latest market summaries, so they must have bought quite a few relatively recently: |
Minna Invest GmbH have taken 3.01% |
Gradual rise of 8% over the past month - could be heading back to 300p ! |
Sorry for double post
Fat fingers using phone!! |
Thanks team BMS for posts much appreciated
I agree and will add as and when spare cash comes my way!
DYOR |
Thanks team BMS for posts much appreciated
I agree and will add as and when spare cash comes my way!
DYOR |
Edison have a new note out - they have a 500p price target.
They forecast 45.4p EPS for the year just finished, with 46.4p EPS this year.
That's backed up with a 13p dividend, rising to 14p this year:
"Outlook encouraging with c 100% valuation upside
The outlook is encouraging, evidenced by the underlying global trade situation (the
IMF raised global GDP growth estimates by 0.2% to 3.1% in February) and the forward order book, which was up 47% to US$83m, driven primarily by activity in the Sale and Purchase division. FY24 results are expected to be released by the end of May.
We have maintained our estimates for FY24 and FY25 but edged down our FY24 dividend expectations from 13.5p to 13.0p, which implies a modest reduction in our previous valuation of 520p to 500p per share, based on our dividend discount model" |
They need to get their IR team on the case. Great forward order book, hopefully net cash should increase materially this next fiscal and EBITDA can edge towards £20m.....bigger yield may attract more buyers, but otherwise perhaps CKSN can buy BMS at this ridiculous valuation!!
DYOR and good evening to you Masurenguy |
Over the past 5 months Clarkson shares are up 50% whereas BMS is only up 10% ! 😒 |
agreed, looks the wrong price still IMO....DYOR |
No reason to not be achieving minimum 45eps FY25 |
Looks good enough for a decent rise today!
I'd caution two things though just so no disappointments later:
1) I have realised that the brokers seem to be treating the acquisition costs in different ways. If you look at the EBIT line, Cavendish are ignoring the existence of it hence their £18m forecast, whereas Edison are much closer to £16m because they are including it
2) The order book growth is a bit of a misnomer as so much of it is beyond 1 year under Gundy. They've really pushed at getting better outer year visibility into that book.
Still way too cheap! |
Positive update with an 8% dividend increase and a 47% order book uplift !
FY24 TRADING UPDATE
Revenue and underlying operating profit in line with market expectations
Braemar announces a trading update for the twelve months ended 29 February 2024 (FY24).
Trading update
The board is pleased to report that the Group has achieved another strong performance, with revenue and underlying operating profit1 for FY24 in line with market expectations. Revenue is expected to be not less than £150m (FY23: £153m) with underlying operating profit of not less than £18m (FY23: £20m), subject to audit. The Group maintained a positive cash position with net cash at 29 February 2024 of £1m (FY23: £7m), a decrease from the prior year after expensing the cost of the previously announced internal independent investigation conducted and concluded last year, certain tax payments and share buy backs during the period.
Proposed dividend
In line with the Group's progressive dividend policy, the board expects to recommend a final dividend of 9p (FY23: 8p) per share, delivering a total dividend for the year of 13p (FY23: 12p), an increase of 8%.
Outlook
The Group entered FY25 with a total forward order book3 of US$83m, a substantial increase of 47% on the prior year (FY23: US$56m), providing the board with confidence for the year ahead.
Notice of results
The Group expects to announce its FY24 results for the y/e 29 February 2024 by the end of May 2024. |
Today's nicely in line year end update suggests the recent drop has made BMS excellent value.
We can expect EPS of somewhere between Cavendish's 38p EPS and Edison's 45.4p EPS.
Accompanied by a 13p dividend, lifted by 8%.
Most importantly, the order book is up a whopping 47% to $83m, suggesting that the current year is looking very good. |
Sunak,The Treasury,& UK investing institutions should be hauled over the coals. At this rate, there won't be a UK stock market to invest in! The Tories have effectively put up a great big for sale sign over UK plc...utterly bonkers |
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